A Financial Crisis Occurs When an Increase in Asymmetric Information

question 5

Multiple Choice

A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system

• A)causes severe adverse selection and moral hazard problems that make financial markets incapable of channeling funds efficiently.
• B)allows for a more efficient use of funds.
• C)increases economic activity.
• D)reduces uncertainty in the economy and increases market efficiency.

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Definitions:

Spermat/o

A combining form used in medical terms to refer to sperm or seed, indicating its relation to spermatozoa or the male reproductive cells.

Hydro

Pertaining to water; often used as a prefix in scientific and medical terms to indicate a relationship to water.

Ejaculat/o

A term referring to the expulsion of semen from the male reproductive tract.

Balan/o

A combining form used in medical terms that relates to the glans penis.